SIDOMULIO, Indonesia, July 25, Reuter - Death and beheadings continue in Indonesia's northernmost province of Aceh and fear of a murky group of rebels is driving outsiders to abandon the province in droves.

Thousands of Javanese peasants resettled in Aceh (pronounced Achay) have streamed out of the province, fleeing from unknown rebels who attack their villages and kill their leaders.

Sidomulio, a remote Javanese resettlement village in the heart of the danger zone on Sumatra's northeastern tip, is now a ghost town, the only sign of life a pack of hungry dogs.

Judging from the houses, most neatly padlocked but all first emptied of anything portable, their owners don't plan to come back in the foreseeable future.

"Wouldn't you be scared if you were up here and they came and killed your village head in the dead of night?" asked an intelligence official tracking two visiting foreign journalists.

Local people say transmigrants in Aceh, part of Jakarta's plan to resettle people from overcrowded Java, have become symbols of the central government, resented by many Acehnese.

"Look, they come here and get given land, a house, money for two years food and seed capital. We locals have to work the same land and what do we get? Nothing," said a young Acehnese.

"I feel badly for them," said a Javanese in the provincial capital of Banda Aceh. "They are poor people who were thrown out of Java like rubbish and now are being thrown out of here. They are being killed for symbolism."

The few transmigrants that are left have no protection.

The government calls the rebels the GPK, or security disturbing movement. Many believe they are disgruntled ex-soldiers kicked out of the army for disciplinary offences. They have targetted police and the military most consistently.

"Police protection, are you kidding? They were the first to leave," said a local resident. "There isn't a guy in uniform who would dare to show his face up here now."

The military, whose heavy-handed tactics are said to have encouraged local support for the rebels, seem to be deliberately promoting the climate of fear.

Soldiers speed up the main highway in broad daylight, headlights glaring and semi-automatic guns pointing menacingly at a clutch of suspected rebels in their truck.

"At roadblocks, if your papers are out of order they'll force you to eat them. You're supposed to keep your I.D. card in your front pocket. If you take it out of your back pocket they'll think you have a gun and clobber you," said another local man.

At least 40 civilians and probably as many troops have died in the past four months, and over 60 people have been arrested.

People talk about the violence in hushed tones, and sometimes not at all. "We can't talk here; even the cups have eyes," said a customer at a roadside restaurant. A helicopter circled overhead.

Fear feeds the rumour mill. In the capital of neighbouring North Sumatra province, Medan, there are stories that rebels set fire to 80 shops in the Acehnese town of Langsa. Acehnese shopowners sitting in burnt-out market stalls in Langsa itself say an electrical fault in a bakery caused the fire.

Foreigners working at the massive government-run natural-gas plant, which provides Jakarta with foreign exchange and adds to local resentment of central goverment, are reluctant to travel by road.

"I wouldn't dream of driving up there," said a seismologist in Medan, 300 kms (180 miles) south of the Lhokseumawe gas plant where he works. "There are so many people out of uniform you have no way of knowing who's who."

"A senior navy officer told us you should never stop at roadblocks unless there's uniformed police AND army AND special forces," another foreign contractor said.

The smart housing complex where foreigner oil workers live is patrolled at night by heavily armed soldiers in jeeps. "It's kind of a downer having the floodlights turned on you when you're coming home from a party," a resident said.

Local Acehnese don't feel threatened by the rebels, and some analysts say the rebels have the tacit support of 80 per cent of the people, who are happy to see the Javanese and the army taken down a peg or two.

"Why should I be scared? I belong here," said a bus driver who covers the route from Lhokseumawe south to Medan. "For me it's a good business. When the transmigrants were leaving the bus was jam full every day."